The regeneration game, by Will Hatchett

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Everyone from the Lonely Planet tourist guides to think-tank boffins agree that Britain's city centres now beat anything on offer in Europe. What is responsible for this transformation, asks Will Hatchett

Some people think that the IRA played a key role in rebuilding Manchester. A huge terrorist bomb devastated Corporation Street in 1996; it also provided a watershed in the city's post-war revival. One could pick out other significant dates – 1988 when Manchester Development Corporation began, 1992 when Hulme City Challenge demolished a brutal deck-access estate, or perhaps 2002, when the Commonwealth Games came to the Northwest.

Whichever is chosen, the city has undoubtedly attained an impressive self-confidence and vitality over the past ten years. Today, Manchester is peppered with striking modern buildings; it is a regional beacon for the arts; it has a state-of-the-art transport system; and its old mills and once-redundant canals are finding a new lease of life.

Eddie Smith is the city's head of regeneration. His office is situated in Manchester's magnificent Gothic revival town hall – a monument to old-fashioned civic values – but his preoccupations are right up to date. Explaining how far Manchester has changed in recent years, he points to a huge chunk of the city to the north and east. This was where the industrial revolution had its roots, but since the 1960s it had been gradually 'hollowed out'. As industry deserted the area, the population plummeted.

Now population loss has stabilised, unemployment is falling and service employers, including the Bank of New York, are moving in. Land values are rising and the airport, to the south, is set to double in size. Manchester now has the largest Asda Wal-Mart supermarket in Europe and, perhaps improbably, is the UK's third most popular overnight tourist destination.

Smith says: 'Our advantage over other places is that we've got economic growth, so we can aspire to residential growth. We've built up the city centre population in the past ten years from virtually nothing to more than 15,000 residents. We are now concentrating on creating new housing markets to the east, particularly around the new sports stadium. I believe that we are well on our way to becoming a true post-industrial city in the next five to ten years.'

Few locals would cite the setting up of an urban regeneration company in east Manchester in 1999 as a milestone. Nor would they know much about the New Deal for Communities or the more recent Salford and Manchester Market Renewal Pathfinder. But these programmes, involving more than £2bn in public and private finance, have undoubtedly made a big difference. Compared with the sticking plaster nature of previous efforts, such as the City Challenge, they are long-term – up to 15 years. Also, at least in theory, they address issues such as education and skills, community safety, transport and environmental improvement as well as bricks and mortar.

Manchester has been politically stable for the past 20 years. This has helped it to use funding programmes strategically. Sportcity, for example, the large modern stadium built for the Commonwealth Games in 2002, was the centrepiece for the redevelopment of east Manchester. Smith says: 'The games were never just about ten days of sport. They were predicated on the long-term economic repositioning of that part of the city.'

Manchester is set to lose its landlord function over the next few years. It is energetically seeking owner-occupiers to revive its flagging neighbourhoods and is enthusiastic about its rising land values. This kind of change would have been inconceivable in the old, Socialist Manchester. But, as New Labour begins its third term, previous certainties and ideologies are falling away.

Dermot Finch, head of a recently formed New Labour think-tank, the Centre for Cities, is paid to think the unthinkable. The centre, which is funded by Lord Sainsbury, aims to propel the government into a new phase of urban policy. Finch was previously a Treasury civil servant. He lived in Washington DC and formerly advised the chancellor on US ideas. He believes that the recent installation of David Miliband as minister for communities, with a place in the Cabinet, will add new energy and focus to this policy area.

The centre, whose launch Miliband attended, is promoting the concept of directly elected mayors for so-called city regions. The idea, which emerged from the failure of elected regional assemblies, is also embedded in John Prescott's Northern Way strategy. Finch argues that 'super mayors' in places such as Greater Manchester, Merseyside, Birmingham, Leeds, Sheffield and Hull could carry a popular mandate. With powers at least as great as those of London's mayor, they could revive both governance and prosperity.

He explains: 'I don't think that individual voters identify with regions. I am from Lancashire – I am not from the Northwest. When you are asking people to vote for things, I think they would vote for a city and an area around it, but they wouldn't vote for a region in its current sense.'

He admits that local authorities would hate the idea. But he argues that the model works well in Barcelona, Bilbao and Stuttgart, for example, and predicts that the Office of the Deputy Prime Minister and the Treasury will increasingly favour the concept.

Are present policies working? 'Well, things have certainly got better. It's less true now that Manchester is worse off than Bristol. But it's not good enough to say "they've got the Urbis centre and a lovely new Metro system, that's Manchester sorted out" ... I think the government needs to tone down the urban renaissance story a bit.

'Yes, cities are doing better, but a lot of that is to do with the effective performance of the economy over the past ten years. The really big test will be the next economic downturn. Will the cities go down if the economy goes down?'

Sir Peter Hall, professor of planning and regeneration at University College London and a member of Lord Rogers' urban task force, set up in 1998, is also upbeat about New Labour's impact. He comments: 'By and large, urban policies have worked as well as one could expect. A hell of a lot of effort has gone into them and there have been some spectacular successes, particularly the renaissance of the core northern cities. They are now written up in the Lonely Planet guides as being as attractive as anything you can find in Europe. It would take a hell of a recession to knock that out.'

However, he adds: 'In the centres of Manchester and Leeds and in parts of Liverpool, you have these strong points of light. The revival has spread maybe a mile or two out. But there are vast outer areas that are really in a pretty melancholy state. The notion is that by some process as yet unknown, especially by improving transport links, you will transfer the benefits of growth outwards. But it is not proven.

'Unless the Market Renewal Pathfinders are massively successful, other parts of the Northwest are still going to be more attractive to live in. They've got to do more than just put in some commuter links. They've got to grow the economies of places like Oldham and Rochdale and give them some of the things that Manchester has got.' Other parts of the Northwest, he says, simply have too many homes and require shrinkage.

Hall is a reluctant supporter of elected mayors for city regions. He sees the policy as a diversion from the real need, which is for radical local government reorganisation. But he says of the idea: 'It's worth trying, because it's the only game in town'.

He thinks the government will be preoccupied by its southern growth agenda in the next few years, which faces growing opposition from Nimbyism and a clutch of new Conservative councils. As to the North, long-term success will depend upon far larger forces than merely knocking down a few old terraces. There should be massive investment, he thinks, for example, in high-speed rail links and in the northern universities. Also, policy makers should get beyond their fixation with city centres, with their loft apartments, bistros and night clubs.

In the 1960s, inner cities were places to drive through quickly, preferably on elevated motorways. It took the pioneering yuppies of the Thatcher era to rediscover them as places to live. Ever since then, urban policy has been catching up and attempting to adapt to a post-industrial society. Much has been learned since Michael Heseltine invented urban development corporations in the early 1980s. And, surprise, surprise, some government policies are actually working.

Peering into the future, which he is in a good position to do, Dermot Finch sees a culling of government programmes. For example: 'The Neighbourhood Renewal Unit is huge and spends a lot of money. People need to figure out if it aligns with other initiatives.' One could perhaps predict, in an increasingly Brown-tinged Labour party, a focus on economic development, rather than on more woolly concepts such as social inclusion.

The relationship between John Prescott and David Miliband will obviously be crucial to delivery. On this topic, Finch becomes opaque. He says: 'Does Prescott get on with Miliband? I've no idea. Does he need to get on with him? Yes, he does.'

Will Hatchett is editor of Environmental Health News. Sir David Henshaw and Lin Homer are talking on 'Regenerating cities: contrasting strategies' at the CIPFA conference on Thursday, June 16

Mersey marvel

Liverpool, which has experienced every government initiative under the sun, has moved forward dramatically in the past five years, particularly because of changes to governance and civic leadership, says chief executive Sir David Henshaw. He claims that Liverpool is 'Britain's fastest growing city', with the regeneration of the city centre the main driver.

'City Challenge paved the way for the large regeneration projects now,' he says. 'It was useful in terms of dealing with difficult ownership issues and provided key investment in the Philharmonic Hall and parts of the Cultural Quarter. Merseyside Development Corporation also did some good work around land preparations and the conversion of Albert Dock.'

However, with the development corporation: 'There was a lack of accountability to the city. Very little consideration was given to the wider city vision.'

Henshaw is positive about the present crop of initiatives, particularly the Housing Market Renewal scheme, which 'was based upon sound, long-term research' and the city's unique Liverpool Land Development Company.

The New Deal, however, ran into teething problems, paradoxically by focusing too much on community consultation rather than outcomes.

He adds: 'Winning the title of European Capital of Culture 2008 is providing further impetus to regeneration. The key to this success is the civic pride of the people of Liverpool.'

And the downside? 'We talk a lot about joining up at the local level but we need to have greater flexibility between government departments centrally. Presently, there are different audit rules for different government departments.'

Miles better

George Black, chief executive of Glasgow City Council, and previously finance director, has seen Glasgow rise from the post-industrial doldrums to being recently voted 'Britain's coolest city'. The current phase started with the 'Glasgow's miles better' campaign of 1980 and the new Burrell Gallery in 1983. In 1990, there were wry smiles in the South when Glasgow became the European Capital of Culture.

In 2002, council tenants voted 'yes' to a total transfer of 80,000 units. The following year, the Scottish Executive allocated £40m to Glasgow, in a cities growth fund. Ambitious plans include regenerating the River Clyde area, renovating canals, increased recycling, business grants and new link roads.

Glasgow's Pacific Quay area is already being transformed into a digital media campus, with a futuristic titanium-clad science centre, an Imax cinema, a millennium tower and a new BBC building.

Other highlights of the city's renaissance are Glasgow Harbour and an ambitious new sports arena.

Glasgow is not opting for an urban regeneration company, says Black. Instead, it has set up the Clyde Waterfront Strategic Partnership Board, to redevelop the old shipbuilding heartlands, Govan and Partick, combining the efforts of Glasgow, Renfrewshire and West Dunbartonshire councils.

'The real challenge,' says Black, 'will be to make sure that this is not just physical regeneration but includes jobs and training opportunities for local people.'

Citing the city's record-breaking public-private partnership, which upgraded its secondary schools, he is optimistic about continued growth: 'With the plans in the pipeline, I can foresee unprecedented levels of investment over the next three to five years.'

Midlands magic

Most people say that Birmingham is much better than it used to be. And it is. The pedestrian-friendly redevelopment of Centenary and Victoria Squares, whose centrepiece is a much-used International Convention Centre, is a spectacular success story in urban re-engineering.

In the 1990s, the city was divided into quarters — for example, the Millennium Quarter and the Jewellery Quarter —each with an ambitious development plan. Smart canalside housing was built at Brindley Place, where no owner-occupier had ventured for decades.

On under-used land on the city fringes, urban villages were built in Bordesley and Bloomsbury, with the help of grants to developers.

In the 2000s, progress has continued impressively. The latest phase has included the redevelopment of the Bull Ring shopping centre and nearby St Martin's Square. To the east of the city, Millennium Point will contain a science discovery centre and an Imax cinema, while the Masshouse Circus development involves demolishing an elevated section of ring road to create a network of public squares and a new park.

Obviously the city, with its population of 1 million, has been liberally sprinkled with regeneration initiatives and partial stock transfers over the past two decades. These have led to physical improvements. But there will be no 'magic bullet' to revive its rather tired council stock — tenants voted 'no' to a total transfer in 2002.

The city is now decentralising into 11 locally controlled neighbourhoods. Lin Homer, chief executive, sees the plan as being integrated with a wider vision to create a city of vibrant urban villages, devolved and improved services and better housing.

But large-scale decentralisation, as the London boroughs of Islington and Tower Hamlets have shown us, can come horribly unstuck. Let's just hope that it works in Birmingham.